New Delhi: India’s middle class can hope for a big relief in the Budget for financial year 2018-19, which will also be the last regular Budget of the NDA government, as the finance ministry is contemplating to hike the personal tax exemption limit and tweak the tax slabs, according to sources.
The proposal before the ministry is to hike the tax exemption limit from the existing Rs. 2.5 lakh per annum to at least Rs. 3 lakh if not 5 lakh, they said.
Besides, the tinkering of tax slabs is also being actively considered by the ministry to give a substantial relief to the middle-income group, especially the salaried class, to help them tide over the impact of retail inflation, which has started to inch up.In the last Budget, Finance Minister Arun Jaitley left the tax slabs unchanged but gave a marginal relief to small taxpayers by reducing the rate from 10 per cent to 5 per cent.
This was for individuals having an annual income between Rs. 2.5 lakh and Rs. 5 lakh.In the next Budget to be unveiled on February 1, the government could lower the tax rate by 10 per cent on income between Rs. 5 lakh and Rs. 10 lakh, levy a 20 per cent rate for those with income between Rs. 10 lakh and Rs. 20 lakh and 30 per cent for income beyond Rs. 20 lakh. At present, there is no tax slab for income between Rs. 10 lakh and Rs. 20 lakh.